Here are three global business trends to have on your horizon. The first – regarding the economic implications of coronavirus – is timely with current events, while the other two, on sustainability and immigrants in the workforce, are more long-term ideas.

TREND 1

Financial advisers counsel investors to stay the course during coronavirus market dip
By Business Record Staff 

As U.S. investors panicked last week amid global reports of a wider outbreak of coronavirus, financial advisers urged their clients to avoid reacting negatively to the market dip, InvestmentNews reported.

More new cases of infection were reported outside of China – including dozens of patients now in the U.S. – and the Centers for Disease Control and Prevention warned the public to prepare for widespread contagion within the U.S. 

Financial adviser Paul Schatz, president of Heritage Capital in Connecticut, said he has tried to prepare clients for months for the volatility. Because of that, he heard from only a few people after the market drop.

A financial planner in Florida who is also a medical doctor said some good news is that the novel coronavirus so far appears no worse, and likely is less severe, than a particularly bad influenza virus this season. 

“The CDC estimates that 16,000 to 41,000 people have died from the flu this year,” Dr. Carolyn McClanahan, director of Life Planning Partners in Jacksonville, Fla., wrote in a column in Financial Planning. “Unfortunately, you don’t see that in the press. And the worst part is that we have immunizations for the flu and people don’t take the time to get protected.”

The problem with a novel virus, McLanahan wrote, is that by virtue of its newness, “people have no immunity — and vaccines can take a year to produce.” And it will take time to understand the severity of the virus, and whether its mortality rate will remain at the current 2%, or turn out to be much higher. The 1918 flu pandemic’s death rate was 60%, she noted. 

Advisers told clients to sit tight, at least until the market recovers, the InvestmentNews article said. 

“I have had a few clients reach out today,” Lamar Watson, founder of Dream Financial Planning in Washington, D.C., said in an email. When taking on clients, Watson uses Riskalyze to understand their risk tolerance, and he explains how volatile the stock market can be, he said. He also encourages clients to focus on what they can control, like spending and saving, he said.

“The coronavirus would definitely fall into the uncontrollable bucket,” Watson said. “I also remind them that their investments are only a small part of their overall financial picture and that this too will pass.”

Baton Global’s Matthew Mitchell, partner, and Chrissy Culek, researcher, offer seven critical decisions to be prepared for. Here’s what they wrote: 

Develop a response plan
Have regularly updated and evaluated business continuity plans in place to ensure a smooth response to a potential pandemic. Create a team within the company, chaired by a senior staff member, who can make quick executive decisions for the organization in response to any coronavirus-related impact to the business and prepare decision-making processes for future incidents.

‍Identify vulnerabilities in the supply chain
Look not only at first-tier suppliers, but also second- and third-tier suppliers to find out if there are any single points of failure where you can trace back your entire supply chain to one plant or one region of the world. Preemptively develop mitigation approaches and continuously monitor risk.

Review contracts
If you have contractual commitments that depend on foreign-sourced goods, review those contracts to identify any rights and requirements under those contracts.

‍Communicate
Communication across the supply chain between customers, suppliers, partners and carriers is critical to proactively planning for disruption events and developing response strategies for prioritized risks. 

Take travel precautions
The U.S. State Department the Centers for Disease Control (CDC) have both issued travel warnings for certain countries affected by the coronavirus. Consult these websites for safety guidance before making travel arrangements. To preempt concerns or refusals to travel, consider temporarily suspending travel directly to an infected region.

Protect your talent
Communication and education: Make the safety and well-being of your employees a top priority. Monitor updates from public health officials and keep employees informed. Educate employees on the virus itself and connect employees with appropriate government agencies, health organizations and other resources to learn more about the virus. The CDC’s website is a great reference source. 

Reinforce sick leave policies: Encourage employees to review company sick leave and paid time off policies, and remind employees to stay home if they are feeling ill. Train managers and supervisors to send employees home if they are sick.

Prepare for remote working and staggered shifts: Develop plans to implement flexible working conditions for a larger percentage for your workforce. Remember to take into account infrastructure needs such as bandwidth and capacity issues for remote access to work servers, conference lines and other necessities. Another idea to consider is to have teams work “half on/half off” where a team that normally is co-located would have a rotation with half the team expected in the office for a period of time while the other half works remotely.

Prepare flexible leave policies: In some communities, early childhood programs and K-12 schools may close in response to the outbreak. Determine how you will operate if absenteeism spikes from those who may stay home to watch their children. Prepare flexible workplace and leave policies for these employees so you can implement these changes swiftly.

‍Plan for the worst-case scenario
Work with a team of experts to identify specific trigger points, potential scenarios, and impacts on people and operations. Scenario planning should identify “levers” that can be pulled and their anticipated impacts so that if the worst happens, you will be well prepared to take concrete steps that will support the health of the company. For steps on how to prepare for economic downtown, check out Baton Global’s article “Lessons Learned: How to Prepare for the Next Recession.”


TREND 2

Corporate sustainability isn’t just for Patagonia anymore
By Sara Maples, research support and sustainability manager, University of Iowa Tippie College of Business

Sustainability is critical to long-term business and organizational success, and global economic leaders are sitting up and paying attention. Advancements in the mobilization and pace of our global marketplace have provided unprecedented opportunities for growth and development, yet the byproduct of this growth has negative environmental impacts and has now reached a critical juncture.

In response, the University of Iowa Tippie College of Business recently became the first public business school in Iowa to sign on to the Principles of Responsible Management, a United Nations-supported initiative to raise the profile of sustainability in universities and equip business students to become drivers of corporate sustainability. By committing to this initiative, the college joined over 800 leading businesses and management schools dedicated to advancing sustainability, responsibility and ethics in teaching, research and thought leadership. As signatories, the Tippie College of Business will better fulfill the purpose of training the next generation of business leaders by preparing them to balance economic and sustainability goals.

Global leaders are also concerned about the environment as reflected in the World Economic Forum’s 2020 Global Risks Report. Climate action failure, biodiversity loss and extreme weather are all listed in the top four global long-term risks for likelihood and impact. Businesses are faced with unprecedented challenges: How do they adapt and operate under a new paradigm of an increasingly resource-constrained world? No other sector offers the wealth and scalability of businesses. Economist Michal Porter argues that businesses are well-positioned to solve global challenges because businesses create wealth and can scale sustainable solutions.

Many corporate leaders are actively integrating sustainability into their businesses to pursue new growth opportunities, stay ahead of regulatory requirements and improve operations. Larry Fink, chairman and CEO of Blackrock, announced in January that his firm will make environmental sustainability a core consideration in investment decisions. More subtle market indicators are also at play. Research by University of Iowa Tippie College of Business associate professor of finance Wei Li recently found that some banks are charging higher rates on corporate loans with terms that exceed five years in U.S. coastal counties with significant projected risk due to sea level rise.

Sustainability is no longer for a niche few. It is mainstream and the movement is growing.


TREND 3

Welcoming immigrant and refugee newcomers in the workplace
By Mark A. Grey, anthropology professor, University of Northern Iowa

With America’s baby boomers retiring in larger numbers and fewer young people entering the workforce, immigrants and refugees may be an alternative source for employees. Hiring newcomers from diverse countries, cultures, languages and faiths presents many challenges but also many opportunities. Here are few things to keep in mind: 

1. Understand and manage expectations. Many immigrants and refugees have expectations about work and life in the United States that are often impossible to realize. In reality, life in a new, complex and dynamic society like the U.S. is very difficult for most newcomers. Ask about their expectations for work and life before they come here. Help in any way you can to “soften the blow” and make their transition as smooth and less stressful as possible.

2. Be patient. Life in a new culture, learning a new language and adapting to new work environments together are one of the most difficult things human beings can go through. Also, keep in mind there is no single pathway by which all immigrants and refugees integrate into our society. Much of their experience and outcome will depend on their cultural experiences and expectations back home (gender roles, timeliness, etc.), their previous work and training experience (Are they literate in their first language? Do they have advanced training but remain unable to get certification in the U.S.?) and, of course, their personalities. Like Americans, no newcomer population is monolithic.

3. How newcomers practice social obligations may be very different from your own. We Americans tend to focus on the success and responsibility of individuals. Most immigrant newcomers come from cultures in which their first obligation and responsibility is to the extended family, the ethnic group or the faith community. Applying our expectations for individual achievement to newcomer communities usually doesn’t work. Take the time to ask them about their social and family obligations.

4. How decision-making works among newcomers may be different, too. 

If your social and family obligations are paramount, maintaining those relationships is often the most important part of making decisions. We Americans often expect newcomers to make important decisions like we tend to, by taking responsibility as individuals. In many other cultures, consulting with members of your faith community, ethnic group and/or extended family is the most important element of decision-making. 

5. Ask a lot of questions. Tell me about where you worked back home. How did your boss there handle this kind of situation? When you took this job, what did you expect to happen (or not happen) in your new position?

6. Vet interpreters. Interpreters do not only convert communication, they also wield considerable power among newcomers. Most interpreters are honorable people who want to help their fellow immigrants succeed in the workplace and their new homeland. However, unscrupulous interpreters may try to settle old scores from back home or exploit the vulnerability of workers for their own profit. Ask around, get references and do background checks on interpreters.   

7. Finally, avoid slang and idioms! They don’t interpret well into other languages and cultures. Idioms like “he can’t cut the mustard” and “things may get out of hand” will not make sense in any interpreted language.